Assam and West Bengal Tea production fell by 10 percent in July, price increases by 40 percent

Tea production in Assam and West Bengal fell by 10 percent last month due to heavy rains and flooding happened in the tea gardens in both the states, say industry executives.

Lockdown implemented in the country has affected the tea production heavily. Irregularities caused in the moment of cargo movement and reduced migrant workers affected the production.

The tea industry is considered to be one of the worst-hit by the lockdown. However, tea prices have seen a rise of 25-40 percent in recent times. But this did not help farmers get good profits as the drop in crop size led to reducing cash flow in the industry.

“It is still raining heavily in Assam and North Bengal. This is going to impact crop size further in July,” said Sujit Patra, secretary, Indian Tea Association.

The tea estates located in the North Bengal and Assam produced nearly 370 million kg of tea last year during the January-June period. According to the estimates, this production will fall by nearly 135million kg and stand at 235million kg in the first six months.

This fall in production can increase the price of tea further, but may not continue till the year-end. The fall in production and increase rate may not help farmers as the production cost doesn’t come down.

The price of tea has increased up to 60 percent and prices of all qualities of tea also increased this year, said J Kalyanasundaram, secretary of Calcutta Tea Traders Association.

The crop which was lost in the first and second flush is the best quality tea of the year. Such tea crop has high demand from packet tea companies to ensure quality in their production. The new loss of such quality has impacted the rate to increase.

July is the start of the peak production in Assam and West Bengal, during this time prices are expected to moderate going forward. However, price increase would depend on the level of demand – both in the domestic as well as export markets